value vs. price

["Devine, James" <jdevine@xxxxxxx>]

[was: RE: [PEN-L:22192] Re: RE: Re: re: re: Historical Materialism]

Ian asks:
> If one can do the quantitative side of Marx without the value
> theory and achieve the same results as those who use the value
> theory, which side is being redundant with regards to that aspect
> of Marx's corpus?

One way of summarizing this whole issue is as follows:

(1) the distinction between value and price roughly corresponds to the
orthodox distinction between "social opportunity cost" and opportunity cost
to an individual. Both of these are quantitative.

(2) the social opportunity cost and value are defined from the perspective
of the society as a whole, though of course we can't assume that society
gets what it wants all the time. Since its perspective is human society,
value is in terms of human effort rather than subjective wants (though those
wants play a role). (Social opportunity cost has to be defined in terms of
some sort of "social welfare function.")

(3) it's important to utilize both value and price (social opportunity cost
and individual opportunity cost). Otherwise, we fall into the fallacy of
composition or into the sterility of methodological individualism.

(4) there are contrasts between the two levels. MOE is aware that social
opportunity cost and individual opportunity cost don't always coincide (so
that there's "market failure"). Modern Marxist theory should be aware of the
distinction between a worker's contribution to the societal pool of value
(value) and what he or she is able to claim from that pool (exchange-value).
Societal rationality isn't the same as individual rationality (however that
word is defined).

(5) But there's unity at the societal level: in the end, the social costs
(value) constrain the individuals in the system, even though it's individual
costs (prices) that are crucial in determining behavior. A capitalist can't
get a profit as a "free lunch."

Jim Devine